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McBride plc: More laundry to be done

By Elaine Cohen (BeyondBusiness) on December 13, 2010 at 10:09am.
Content:

McBride plc is one of the leading behind-the-scenes players on our supermarket shelves, though you may not know it. They are responsible for manufacturing many of the private label household and personal care products for large retail groceries, supplying, amongst others, all of the top-ten retailers in Western Europe. The business generates revenues of GBP 812 million and employs over 5,000 people at 11 sites in over 20 countries in Europe, Eastern Europe and the Far East. Not a small concern by any means, it is traded on FTSE and has been included in the FTSE4Good index from 2009. McBride is no stranger to sustainability, publishing their 7th report in 2010, entitled "Passionate about Sustainability". There is apparently no shortage of passion at McBride's – their Annual Report is entitled "Passionate about Private Label."

This report packs a punch with a very nice design and clear presentation, especially relating to environmental targets. Overall though, it is rather basic in substance. Right on the very first page, McBride explains their "passion" saying, "We believe that Private Label has an important role to play in the economy". Private Label is indeed an interesting sector, though McBride provide little context about why this is so. Is this important role to do with the affordability of Home and Personal Care products to a wider range of consumers (as private label products are cheaper than branded products), thus enhancing access to hygiene, personal wellbeing and quality of life? Is it about McBride's ability to deliver formulations for a greener economy, supporting a more sustainable retail offering and changing consumer behaviour? Or is it about providing technologies to retailers that enable them to compete with the Unilevers, Procter and Gambles and other super-players of the home and personal care industry, and thereby changing the balance of power in the supply-demand game? In many ways, the Private Label industry is regarded as an invisible underdog, producing what they are asked to produce with little clout or influence. An example is given in a case study where, in response to heightened consumer concerns about the spread of viruses in the home, J Sainsbury asked McBride to produce an antibacterial cleaner which kills the H1N1 virus. McBride was able to do this on a very short lead-time, thereby gaining Sainsbury's recognition and enabling the retailer to offer consumers an innovative product on a fast timescale. However, lacking any sort of stakeholder engagement review or materiality prioritisation, this report doesn’t really answer fundamental sustainability questions or get to below-the-surface issues. The opening remarks of the Chief Executive Chris Bull confirm that "we remain aligned to the evolving need of our customers and our markets"; but the report doesn’t elaborate on how these needs are ascertained or what they actually mean. On a positive note, however, McBride has been active in the development of the AISE (sustainable cleaning) charter, an industry association of private label manufacturers with a certification scheme, which is an important sector initiative.

Despite the passion and the environmental focus of this report, and use of external consultants to track and report environmental performance, actual results are not impressive. Energy, emissions and waste have each been reduced by only 1%. This is attributable mainly to reduced volumes and site closures and not to process changes delivering improved energy efficiency. Water usage was down by 4.6% - in a business where concentrates are becoming the norm and have had a big impact in the last year, this reduction also seems modest. Beyond environment, a strong focus on Health and Safety (which has a full 6 pages in this 33 page report), and a few examples of community support, nothing is written about supply chain practices. This is particularly notable with regards to operations in the Far East and details of raw materials sourcing. Other areas that lack detail include the approach to acquisitions and closures, which are a feature of McBride's growth, and employment practices, with a notable absence from the report of any mention of diversity and inclusion in the McBride sustainability program. Clearly an all-white-male 8-member management team has not set this as a priority. 


Communication:

A nice feature of this report is the one page Executive Summary which highlights environmental and safety performance. However the report does not follow a predictable structure, and with no index, it is not easy to know just what is included without browsing the entire report. In many sections, the language of this report is just a little too informal to present an authoritative voice. In other parts of the report, such as the Safety section, the language is highly technical and contains details of legislation changes which don't seem quite core to the sustainability story. Something about the style of this report creates a disconnect between the different sections, as though it had been pieced together from different sources, without a thorough overall edit.


Credibility:

This report is really an EHS (Environment, Health and Safety) report and not a comprehensive disclosure of the company's full scope of sustainability impacts. The report does not follow any known framework such as the GRI, and is not assured. Stakeholders, such as employees, suppliers or key European retailers do not have a voice in this report (with the exception of the story about collaboration on a new product development with J Sainsbury).

Full marks to McBride for ensuring employees get the message via a values communications campaign roll-out manager. However, I had to chuckle when I read that "Greta Vanderjeugt is driving our Mission, Vision and Principles engagement programme across the Group and making a big impact in her customised car." 17 European sites in 7 countries by car? Wonder what that does for McBride's carbon emissions. No mention if it's a hybrid. The new Mission, Vision and Principles statement, however, does not mention responsibility, accountability or anything to do with societal and environmental impacts. The Company's vision is to become the most successful Private Label Company in the world by being a supplier of choice and doubling in size and profitability. No evidence of a triple bottom line here. So much for a passion for sustainability.

Let's hope that McBride passion for sustainability will translate over time into a broader view of their company's impacts, rather than a list of the things that they do. As it stands in this report, the focus seems to be on developing solutions that customers require, with focus a on greener products and improved eco-efficiency, staying close to sustainability aspects which immediately reduce costs (energy, packaging reduction etc) or are highly regulated (health and safety). The company is clearly getting to grips with the basics and this report demonstrates a positive direction but, as with my weekly household laundry, there is always so much more to do.


Recommendations:

1.    Deliver a more comprehensive report, including elements relating to governance, ethics, stakeholders, materiality, employment practices and more supply chain detail.
2.    Consider using the GRI framework – both to assist in creating a more logical structure for the report and also to create a benchmark of reporting on expected indicators.
3.    Reconsider the reporting theme and style to give a more coherent overall delivery.

 
elaine cohen is the Joint CEO of BeyondBusiness Ltd, www.b-yond.biz/en, a leading CSR reporting and consulting firm,  specializing in a wide range of consulting services for the development of social and environmental responsibility of businesses.